Water reform: ACCC funded to deliver water broker code of conduct

Australia’s competition watchdog will spend $12m regulating brokers trading $1.8 billion in Murray Darling Basin water each year.

Funding has finally been allocated to regulating the trade of Australia’s most precious resource - water.

The Australian Competition and Consumer Commission has been given $12 million in federal funding to regulate the nation's water markets and develop a mandatory code of conduct for water brokers.

Under the code, which is due to come into effect in 2024, all brokers in the basin would be forced to disclose when they were receiving multiple fees and commissions in relation to a single irrigators’ trade, always act in the best interests of a client and reveal if they have a personal interest in a trade.

The allocation is part of a $31.8 million package of measures announced by federal Water Minister Tanya Pliberesek today, that finally deliver on reforms that were launched by the previous Coalition Government in 2019.

“Our investment of $31.8 million to deliver water market reform will go a long way to improve integrity, prohibit market manipulation and provides us with avenues to deal with instances of insider trading,” Ms Plibersek said.

“Water markets reform will crack down on the cowboys of the system, and make sure it’s a level playing field for those doing the right thing.”

Water market reform will “crack down on the cowboys of the system”, says Federal Water Minister Tanya Plibersek.

“As an example, the integrity reforms will include: prohibiting market misconduct, introducing a mandatory code for water market intermediaries, introducing mandatory rules and processes for water announcements and broadening and strengthening price reporting obligations.

“I look forward to working in collaboration with state and territory Basin Ministers to deliver this reform.”

The funding includes:

$12 MILLION over four years to the ACCC to regulate water market conduct. This will ensure the ACCC can enforce the new mandatory code of conduct for water market intermediaries and enforce new market misconduct prohibitions.

$9.2 MILLION over four years for the Inspector-General of Water Compliance to regulate market data. This will ensure enforcement of new water markets data requirements, which are critical to the success of the new integrity safeguards. The ACCC found that lack of information was a major barrier for transparency and compliance with existing laws.

$9.6 MILLION over four years for the Department to implement the roadmap recommendations. This includes drafting necessary legislative amendments and preparing new legislation for the whole suite of water market reform measures

In addition, the Bureau of Meteorology will receive funding of $1 million to scope the development of a National Water Data Hub which will improve national water information to provide industry with quality, timely and consistent data.

The Australian Water Brokers Association issued a statement supporting the reforms.

“Increased transparency and increased market confidence for the benefit of all water market participants has been at the core of the AWBA goals,” the AWBA stated.

“The current funding announcements by the federal government are welcomed by the AWBA as a timely and critical step after over three years of water market inquiries, commencing the actual regulatory and system changes necessary to meet those goals.”